Monday, October 06, 2008

Why Nobody Cares About the Google-Yahoo Advertising Deal...

Here's a case where everybody outside of Silicon Valley is left scratching their heads.

For those of you who don't know, the two biggest internet giants, Google and Yahoo, recently announced a partnership. Both companies rely on advertising to make their profits (you know, those obnoxious text ads on the sides of web pages that you would never think to click on), and the main thing to understand about the new partnership is that Yahoo would basically be allowed to display Google's ads on its own search terms.

In other words, right now if you do a Yahoo search for something very obscure, chances are that Yahoo doesn't have any relevant ads for it. However, Google does, so Yahoo is now going to serve Google ads on those obscure searches.

Still with me?

Ok, now what gets tricky is that, because Google and Yahoo are such corporate behemoths in terms of market share, the U.S. Justice Department has begun an antitrust investigation into this advertising partnership. The question they are seeking to answer is whether such an alliance would constitute a virtual monopoly in the internet search/advertising industry, and, if it did, whether it would significantly harm consumer interests.

Some advertisers strongly oppose the partnership fearing it would only accelerate Google's dominance, and are even calling for more transparency in Google's auction system algorithm - the company's holy grail.

But should any of the rest of us care? Probably not. If Yahoo wants to essentially outsource its search advertising on obscure terms, then so be it. Internet surfers will continue ignoring most of the ads anyway, and publishers will probably be better off with more relevant ads to serve (and collect money from). The only potential losers in all of this are the advertisers themselves, who are afraid of rising prices, and perhaps rightfully so, but they can't expect too much sympathy from a public that on a daily basis is forced to fight a seemingly neverending constant barrage of online advertisements.


At 12:07 AM, Blogger william said...

Google Adwords advertisers who advertise in specific markets nationally or regionally can target their ads by metropolitan area or by city. Although not referenced, Google’s metropolitan area targeting looks slightly similar to the Designated Market Area system developed by Nielsen Media Research which incorporates Nielsen’s broadcast media markets and distribution scheme.
Search Engine Optimization


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